RealCo Accelerator Opens in San Antonio for Internet Tech Startups
San Antonio—There is a new startup accelerator in San Antonio that provides early stage funding, mentorship, and more for business-to-business Internet tech companies.
RealCo’s accelerator program lasts up to 15 months and offers startups as much as $125,000 in early operating capital for a small equity stake in return. The accelerator is led by partners Chris Saum, Michael Girdley, and Teresa Evans. The latter two of the group are already heavily involved in other ventures in the rising San Antonio startup world. Saum, an Austin, TX, native who moved to San Antonio for the position, is joining RealCo after an oil and gas startup he co-founded, Mud Geochemical, sold in November.
RealCo’s announcement comes only three months after Techstars, the Boulder, CO-based company with a chain of accelerator programs around the U.S., closed its Techstars Cloud operations in San Antonio. The company had promised to run four programs, and completed that goal last year. It did not take long for Girdley—who has been a driver behind San Antonio’s recent tech renaissance by co-founding coding school Codeup, venture capital firm Geekdom Fund, and the San Antonio Angel Network—and others to replace it.
That the RealCo accelerator program can last up to 15 months is one of the appealing factors to young companies, argues Saum, who is in charge of finding startups and bringing them to the program. The approach allows Saum and Evans to build programs that can be customized to each individual startup. Saum believes tailoring programs to a startup’s specific needs can help propel it towards a venture funding round.
“We understand where they’re at and understand the objectives to the next step and help them get there,” Saum said in a telephone interview.
Saum says RealCo has a “tiered” approach, for instance, that puts startups in one of five different course levels, depending on how far along they are. Each tier has certain requirements, and offers varying levels of funding. For the earliest stage companies—ones with a complete founding team, business hypothesis and model, and target customers—RealCo offers $25,000 for a 6 percent equity stake, Saum says.
To move on to the next tier of the program, a company would need a beta product and pilot customers, and get a $50,000 convertible note in return, Saum says. The third level offers another $50,000 convertible note for similar advances, like achieving certain revenue goals. The accelerator doesn’t offer more funding after that, but it does expect specific revenue growth to get startups to the final stage of the program: raising a Series A round.
Not all of the startups will move at the same pace, Saum says, so RealCo will be flexible with how long they will give companies to graduate from one level to the next. More advanced businesses can start at later levels. The expectation is that most will progress every few months, he says. That is why RealCo accepts new businesses into the program every quarter. Saum says RealCo expects to have no more than 9 or 10 startups in its program at one time.
Geekdom Fund is bankrolling the effort, Saum says, and would be an obvious candidate for funding some of these companies as they progress. So would the newly christened San Antonio Angel Network and Lew Moorman’s venture fund Scaleworks, among others. RealCo is renting office space for the accelerator and its portfolio companies at the Geekdom co-working space in downtown San Antonio.
While many accelerators offer shorter courses, RealCo is not alone in offering more lengthy programs. Tech Wildcatters developed a similarly structured longer-term program called The Gauntlet, which has a tiered progression that allows companies access to more capital. There are dozens of other accelerators across the U.S. and worldwide, offering a bevy of benefits for anywhere from a few months to a year or more.
RealCo currently has three startups in its portfolio. Zenus, founded in Houston, has a face recognition software that automates manual tasks for businesses. Invisible Cloud, founded in Portugal, has developed software for handling and collecting invoices. Dauber, founded in San Antonio, has an app for the trucking industry. The founders of RealCo’s accelerator companies have to move to San Antonio, at least for the first few levels of the program.
“We’re excited to collaborate with community leaders,” says Saum, who was hired this month to get the accelerator running. “Our mission is to provide startups resources they need to grow to start their own business.”